Obama’s Legend

The legend: that Obama began in 2009 from the worst financial hole since the Depression.

Not true. The economic hole in which Ronald Reagan began in 1981 was far deeper.

In January 2009, Obama inherited an unemployment rate of 7.6 percent. Average inflation for the previous year was 3.8 percent. The rate for a 30-year fixed-rate home mortgage was 6 percent.

In 1981, Ronald Reagan inherited an unemployment rate of 7.5 percent and on a steep uptick. The inflation rate was 13.5 percent. And the rate for a new home mortgage was 13.7 percent. The purchasing power of those on fixed incomes had fallen by 30 percent under Carter, throwing millions of seniors and others below the poverty line. There were gasoline shortages and long, long lines at filling stations. Carter himself described the mess the country was in as a “malaise.” Economists had to coin a new word for it, “stagflation”– a supposedly impossible combination of very high inflation with even higher unemployment.

via Obama’s Legend – Michael Novak – National Review Online.

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